CTC vs in-hand salary in India: what an offer really pays in 2026-27

CTC (cost to company) is everything your employer spends on you in a year. In-hand salary is the part that reaches your bank account. The gap has two layers. First, the employer’s provident fund contribution and a gratuity provision sit inside CTC but are never paid to you monthly. Second, your own PF contribution, professional tax and income tax come out of what is left. On a typical structure for tax year 2026-27, a ₹12 lakh CTC pays ₹85,396.15 a month in hand and a ₹20 lakh CTC pays ₹1,29,340.26. Every figure here was worked out with our CTC to in-hand calculator.

What sits inside CTC

Component	What it is	Do you get it every month?
Basic pay (plus DA)	The fixed core of your pay. PF, gratuity and HRA are all worked out from it.	Yes
House rent allowance	Paid towards rent. Fully taxable in the new regime.	Yes
Special and other allowances	The balancing figure that brings the total up to the agreed amount.	Yes
Employer PF	The employer’s 12% contribution to your provident fund.	No, it goes into your PF account
Gratuity provision	Money set aside for a payout when you leave after qualifying service.	No, and you may never receive it
Employer NPS	An optional pension contribution.	No, it goes into your NPS account
Insurance and benefits	Group health cover, meal cards and similar, where the employer counts them.	No

Variable pay and bonuses are often inside CTC too. They are paid only if targets are met, so leave them out when you work out a monthly budget. The calculator handles fixed pay only.

What is deducted from gross salary

Gross salary is CTC minus the employer-side items above. Three things then come off it.

Employee PF. You contribute the same share as your employer. The Code on Social Security sets 10% of wages and lets the government raise it to 12% for notified establishments; the statutory rate in use is 12% of basic wages and dearness allowance. The wage ceiling for mandatory cover rose from ₹15,000 to ₹25,000 a month under a Gazette notification dated 17 September 2026. Some employers pay 12% on your full basic. Others cap it at the ceiling, which makes ₹3,000 a month from each side.

Professional tax. A state levy. The Constitution caps it at ₹2,500 a year for any one person, and some states do not charge it. The examples here use ₹2,400.

Income tax. The calculator uses the new regime, which applies unless you opt out. Salaried people get a ₹75,000 standard deduction, and a rebate removes the tax when taxable income is ₹12 lakh or less. Above that the slab rates apply, plus 4% cess. Professional tax and your own PF contribution do not reduce taxable income in the new regime.

In-hand pay at each CTC level

Assumptions: basic pay is 50% of CTC, PF is 12% of the full basic from each side, CTC includes a gratuity provision of 4.81% of basic, professional tax is ₹2,400 a year, and there is no employer NPS, variable pay or other deduction. Figures are for a full year in the new regime.

Annual CTC	Gross salary	Employee PF	Income tax and cess	In-hand per month
₹6 lakh	₹5,49,576.92	₹36,000	₹0	₹42,598.08
₹8 lakh	₹7,32,769.23	₹48,000	₹0	₹56,864.10
₹10 lakh	₹9,15,961.54	₹60,000	₹0	₹71,130.13
₹12 lakh	₹10,99,153.85	₹72,000	₹0	₹85,396.15
₹15 lakh	₹13,73,942.31	₹90,000	₹77,835	₹1,00,308.94
₹18 lakh	₹16,48,730.77	₹1,08,000	₹1,20,702	₹1,18,135.73
₹20 lakh	₹18,31,923.08	₹1,20,000	₹1,57,440	₹1,29,340.26
₹25 lakh	₹22,89,903.85	₹1,50,000	₹2,63,875	₹1,56,135.74
₹30 lakh	₹27,47,884.62	₹1,80,000	₹3,97,140	₹1,80,695.38
₹40 lakh	₹36,63,846.15	₹2,40,000	₹6,82,920	₹2,28,210.51
₹50 lakh	₹45,79,807.69	₹3,00,000	₹9,68,700	₹2,75,725.64

Up to ₹12 lakh of CTC there is no income tax on this structure, and about 85% of CTC reaches your account. At ₹50 lakh it is about 66%. The missing part is not all lost: both PF contributions sit in your PF account. At ₹15 lakh that is ₹1,80,000 a year.

Why two offers with the same CTC pay differently

Here is one ₹15 lakh CTC under six structures. Only the item named in the first column changes from the base case.

₹15 lakh CTC	Gross salary	Employee PF	Income tax and cess	In-hand per month
Base case, as in the table above	₹13,73,942.31	₹90,000	₹77,835	₹1,00,308.94
PF capped at the ₹25,000 wage ceiling	₹14,27,942.31	₹36,000	₹86,259	₹1,08,606.94
Basic pay is 40% of CTC	₹13,99,153.85	₹72,000	₹81,768	₹1,03,582.15
Gratuity not counted inside CTC	₹14,10,000.00	₹90,000	₹83,460	₹1,02,845.00
Employer NPS at 10% of basic	₹12,98,942.31	₹90,000	₹24,900	₹98,470.19
₹3,000 a month of insurance and meal deductions	₹13,73,942.31	₹90,000	₹77,835	₹97,308.94

The spread is ₹11,298 a month between the highest and lowest rows, on the same headline number. Three things drive it.

• How PF is worked out. Capping PF at the ceiling adds ₹8,298 a month to in-hand pay, but ₹1,08,000 a year less goes into your PF account.
• The share that is basic pay. A lower basic means smaller PF and gratuity amounts and more cash now. The Labour Codes limit this: if allowances are more than half of your total pay, the excess is added back to wages when PF and gratuity are worked out.
• What the employer counts as CTC. Gratuity, insurance premiums and NPS all raise the headline without raising monthly pay. NPS at least comes with a tax saving. The employer’s contribution is deductible up to 14% of basic in the new regime, which is why tax falls from ₹77,835 to ₹24,900 in that row.

So when you compare offers, ask for the monthly gross and the PF basis, not just the CTC.

The band where a raise barely shows

On the base structure, a ₹13.9 lakh CTC pays ₹98,948.88 a month with no income tax. At ₹14 lakh the figure is ₹99,025.51, and at ₹14.5 lakh it is ₹98,622.85, slightly lower. Taxable income has just crossed ₹12 lakh, so the rebate no longer covers the tax. Marginal relief limits the tax to the income above ₹12 lakh, but cess is added on top, and more of the extra CTC also goes to PF and gratuity. Past this band, pay climbs again. The salary hike calculator shows that a move from ₹14 lakh to ₹15 lakh puts only 15.4% of the raise in your hand, while a 10% hike on ₹15 lakh puts 71.3% there.

How PF and gratuity work

Provident fund. Both contributions build up in your name and earn interest; the EPFO’s Central Board recommended 8.25% for 2025-26. Part of the employer’s share goes to the pension scheme, worked out as 8.33% of wages up to the ceiling. The calculator does not split that out.

Gratuity. Under section 53 of the Code on Social Security, 2020, in force from 21 November 2025, an employer pays 15 days’ wages for every completed year of service, counting a part-year of more than six months as a year. A day’s wage is the monthly rate divided by 26. You need five years of continuous service, except in cases of death, disablement or the end of a fixed-term contract. Fixed-term employees are paid pro rata and qualify after one year. The maximum is currently ₹20 lakh.

On the ₹15 lakh example the monthly basic is ₹62,500. The gratuity calculator gives ₹1,80,288.46 after five years, which is what five years of the ₹36,057.69 provision adds up to. Resign after 4 years 7 months and it shows nothing, because the five-year condition is not met. After 10 years 7 months it counts 11 years: ₹3,96,634.62.

How to check this yourself

1. In the CTC to in-hand calculator, enter Annual CTC and Basic + DA as a share of CTC from your offer letter.
2. Choose the Provident fund basis and tick CTC includes a gratuity provision (4.81% of basic) if your offer lists gratuity.
3. Fill in Employer NPS contribution (% of basic), Professional tax per year and Other monthly deductions (insurance, meals).

The ₹15 lakh row by hand: basic is ₹7,50,000, so employer PF is ₹90,000 and the gratuity provision is 7,50,000 × 15 ÷ 26 ÷ 12 = ₹36,057.69. Gross salary is ₹13,73,942.31 and taxable income, after the ₹75,000 standard deduction, is ₹12,98,942.31. Slab tax is ₹20,000 + ₹40,000 + 15% of ₹98,942.31 = ₹74,841.35, and 4% cess makes it ₹77,835. Take off employee PF and ₹2,400 of professional tax and ₹12,03,707.31 is left, or ₹1,00,308.94 a month. The income tax calculator gives the same tax for that gross salary, and the take-home pay calculator gives the same monthly figure from the payslip amounts.

What the calculator cannot do: it uses the new regime only, so it ignores the HRA exemption and other old-regime deductions (work those out with the HRA calculator). It does not model variable pay, perquisites, voluntary PF or the tax on very large employer contributions. Your payslip can also differ month to month, because employers spread tax across the year and adjust it after your declarations.

Related tools

• CTC to in-hand calculator: your own CTC, line by line.
• Take-home pay calculator: gross pay minus the deductions on your payslip.
• Gratuity calculator: the payout for your wages and years of service.
• Salary hike calculator: what a raise adds to monthly pay.
• Income tax calculator: tax under both regimes.
• HRA calculator: the exempt part of HRA in the old regime.

Figures checked against the sources listed below on 13 October 2026. This is general information, not tax or financial advice; your offer letter and payslip are the final word on your own pay.